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HomeMy WebLinkAboutHorner, Carla; 2006-10-27;RECORDING REQUESTED BY STEWART TITLE OF CALIFORNIA DGC# 2006-0766113 RECORDING REQUESTED PURSUANT TO GOVERNMENT O ft R 2 4 CODE SECTION 27383 & " ° * RECORDING REQUESTED BY: C\^j City of Carlsbadu.i/ WHEN RECORDED MAIL TO: City of Carlsbad City Clerk's Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad. California 92008 OCT 27, 2006 4:25 PM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE G R E G 0 RY J S MIT H. CO LI N T Y R E CO R D E R FEES: 0.00 WAYS: 2 OC: AFNF PAGES: 30 2006-0766113 (Space aboveJor Recorder's Use) ' RESALE RESTRICTION AGREEMENT, AND OPTION TO PURCHASE CITY OF CARLSBAD HOMEBUYER PROGRAM - 2006 Owner: Carla A. Homer Drive Address of Home: 571 Laguna AWuls" Carlsbad, CA 92008 This Resale Restriction Agreement and Option to Purchase (the "Agreement") is entered into as of this 10th day of October 2006, by and between the City of Carlsbad (the "City "), Wave Crest Resorts II, LLC, a California limited liability company (the "Developer ") and Carla A. Homer (the "Owner "). RECITALS A. The City has developed an affordable homeownership program designed to assist qualified lower income households purchase their homes located within the City of Carlsbad (the "Homebuyer Program "). B. In connection with the Homebuyer Program, Wave Crest Resorts II, LLC, a California limited liability company (the "Seller ") and the City entered into that certain Affordable Housing Agreement dated November 17, 2003 (the "Affordable Housing Agreement"). 1010\19\345304.3 20825 C. Also in connection with the Homebuyer Program, the Developer entered into a loan agreement with the Carlsbad Redevelopment Agency (the "Agency") dated June 26, 2006 (the "Agency Loan Agreement"). D. Pursuant to the Agency Loan Agreement and the Affordable Housing Agreement, the Developer made a loan in the amount of two hundred fifty thousand _ Dollars ($250,000 ) to Owner to purchase a single-family dwelling located in Carlsbad, California on that certain real property and more particularly described in Exhibit A (the "Home"). The Developer then assigned this loan to the City (the "Homebuyer Loan"). E. The Homebuyer Loan is made up of Agency Low and Moderate Income Housing Funds and a City subsidy more particularly described in the Affordable Housing Agreement. In consideration of the Homebuyer Loan, the Owner agreed to enter into the Agreement. F. As used in this Agreement, the term "Home " includes both the real property and all improvements now or hereafter erected on the property and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the property. G. The purchase price of the Home is three hundred seventy thousand _ Dollars ($370,000 ) (the "Purchase Price "). H. The Owner is receiving a First Lender Loan in the amountof O thirteen thousand five hundred Dollars ($113,500 ) (the "First Lender Loan ") from Bank of America _ (the "First Lender "). The First Lender Loan is secured by a deed of trust dated October 26 _ , 2006, executed by the Buyer in favor of First Lender and recorded in the County of San Diego on _*** _ , 2006, and assigned Recorder's Serial No. _*** _ (the "First Lender Deed of Trust"). I. The Loan is evidenced by a promissory note in the amount of the Loan (the "City Note "). This Agreement and the City Note shall be secured by a deed of trust (the "City Deed of Trust ") subordinate to the lien of First Lender Deed of Trust. J. The purpose of this Agreement is to place resale controls on the Home, to provide the City an option to purchase the Home at a restricted price and to ensure that the Owner complies with the Homebuyer Program requirements. K. The Home is located in the Village Redevelopment Project Area. This agreement meets the requirements of Health and Safety Code Sections 33334.2 and 33334.3 and permits the Agency to meet the affordable housing r production requirements of Health and Safety Code Section 3341 3(b). L. This Agreement and the City Note require repayment of the loan plus contingent interest and, in certain instances, payment of excess proceeds of sale and excess rental proceeds. This Agreement and the City Deed of Trust will remain in full effect as an encumbrance on the Home after any prepayment of the City Note by the Buyer. *** RECORDED CONCURRENTLY HEREWITH 1010\19\345304.3 20826 NOW, THEREFORE, in consideration of the benefits received by the Owner and the City, the Owner and the City agree, as follows: 1.1. DEFINITIONS AND EXHIBITS A. The following terms are specifically defined for this Agreement and their definitions can be found in the Sections indicated below: (1) "Agency"-Recital C (2) "Agreement" - first sentence of the Agreement on page 1. (3) "City" - first sentence of the Agreement on page 1. (4) "City Deed of Trust" - Recital H. (5) "City Designated Purchaser" - Section 12B. (6) "City Note"-Recital H. (7) "City Option" - Section 12A. (8) "City Response Notice" - Section 10. (9) "Eligible Purchaser" Section 15B. (10) "Excess Rental Proceeds" - Section 4. (11) "Excess Sales Proceeds" - Section 16. (12) "Extended Term" - IOC. (13) "Fair Market Value" - Section 14B. (14) "First Lender" - Recital G. (15) "First Lender Deed of Trust" - Recital G (16) "First Lender Loan" - Recital G. (17) "Homebuyer Loan" - Recital D. (18) "Home" - Recital D and Recital F. (19) "HUD" - Section 30. 1010\19\345304.3 20827 (20) "Initial Term" - 10B. (21) "Market Purchaser" - Section IOC. (22) "Maximum Restricted Resale Price" - Section 14. (23) "Median Income" - Section 14A. (24) "Owner" - first sentence of the Agreement on page 1. (25) "Owner's Notice of Intent to Transfer" - Section 8. (26) "Proposed Purchaser" - Section 15A. (27) "Purchase Price" - Recital F. (28) "Restricted Future Sales Price" - Section 14A. (29) "Transfer" - Section 7. B. The following Exhibits are attached to this Agreement: (1) Exhibit A: Legal Description of Property (Home) (2) Exhibit B: Form of Owner Occupancy Certification (3) Exhibit C: Form of Owner's Notice of Intent to Transfer (4) Exhibit D: Form of Owner Acknowledgement of City Response Notice (5) Exhibit E: Form of Owner Request for City Subordination to Refinanced First Lender Loan 2. OWNER CERTIFICATIONS The Owner certifies that (i) the financial and other information previously provided in order to qualify to purchase the Home is true and correct as of the date first written above, (ii) the Owner is an Eligible Purchaser, and (iii) the Owner shall occupy the Home as the Owner's principal place of residence. 3. OCCUPANCY AND LEASING OF HOME A. The Owner shall occupy the Home as the Owner's principal place of residence within sixty (60) days of close of escrow on the Homebuyer Loan. Failure by the Owner to occupy and continue to occupy the Home as the Owner's principal place of residence shall constitute a default under this Agreement for which the City may exercise its option to purchase pursuant to 1010\19\345304.3 4 20828 Section 21 below. The Owner shall be considered as occupying the Home if the Owner is living in the unit for at least ten (10) months out of each calendar year. The Owner shall provide an annual written certification in the form shown in the attached Exhibit B, to the City that the Owner is occupying the Home as his or her principal place of residence. 4. LEASING OF HOME The Owner shall not lease the Home to another party. Any lease of the Home in violation of this Agreement is prohibited, and shall be a default under this Agreement and the City Deed of Trust. The Owner further agrees that, in the event the Owner leases the Home to a third party in violation of this section, any rents in excess of the owners monthly housing payment, which includes the principal mortgage payment and interest, property taxes and insurance, paid to the Owner by the lessee (the "Excess Rental Proceeds") shall be due and payable to the City immediately upon receipt thereof by the Owner. Such excess rental proceeds shall be considered a recourse debt of the Owner to the City, as evidenced by the Note, which the City may collect by legal action against the Owner and/or by foreclosure under the City Deed of Trust. 5. HOMEBUYER EDUCATION CLASS The Owner shall attend all sessions of a first-time homebuyer education class offered by Community Housing Works . 6. MAINTENANCE AND INSURANCE PROCEEDS A. The Owner shall maintain the Home, including landscaping, in good repair and in a neat, clean and orderly condition and will not commit waste or permit deterioration of the Home. Failure by the Owner to maintain the Home shall constitute a default under this Agreement for which the City may exercise the City Option to purchase the Home pursuant to Section 21 below. B. The Owner shall maintain a all-risk property insurance coverage on the Home equal to the replacement value of the Home (adjusted every five (5) years by appraisal, if requested by City), naming the City as an additional insured. Additional insurance requirements are set forth in Section 6 of the City Deed of Trust. Owner shall provide City with proof of insurance as part of its annual occupancy certification pursuant to Section 3. 7. TRANSFER AND SALE RESTRICTIONS Any Transfer of the Home will be subject to the provisions of this Agreement including, without limitation, exercise of the City Option pursuant to Section 12 below. "Transfer " shall mean any sale, assignment or transfer, voluntary or involuntary, of any interest in the Home, including, but not limited to, a fee simple interest, a joint tenancy interest, tenancy in common interest, a life estate, a leasehold interest, an interest evidenced by a land contract by which possession of the Home is transferred and Owner retains title, or a deed of trust. Any Transfer without satisfaction of the provisions of this Agreement is prohibited. A Transfer shall not include a transfer: (i) to an existing spouse or Domestic Partner who is also an obligor under the City Note; (ii) by the Owner to a spouse or Domestic Partner where the spouse or Domestic Partner becomes 1010\19\345304.3 20829 the co-owner of the Home; (iii) between spouses as part of a marriage dissolution proceeding; (iv) to an existing spouse or Domestic Partner of Owner by devise or inheritance following the death of Owner; (v) by Owner into an inter vivos revocable trust in which Owner is the beneficiary and which does not relate to a transfer of right of occupancy to the Home; (vi) by deed of trust or imposition of a lien subordinate to the City Deed of Trust or (vii) refinance of the First Lender Loan meeting the requirements of Section 28 of this Agreement; provided, however, that Owner shall provide written notice of all such transfers to City pursuant to Section 8 below; and Owner shall continue to occupy the Home as his or her principal place of residence (except where the transfer occurs pursuant to subsection (iii) or (iv) above, in which event the transferee shall owner- occupy the Home and affirmatively assume Owner's obligations under this Agreement, the City Note and the City Deed of Trust). For the purposes of this Section 7, "Domestic Partners" shall mean two unmarried people, at least eighteen (18) years of age, who have lived together continuously for at least one (1) year and who are jointly responsible for basic living expenses incurred during their domestic partnership. For purposes of this section, an individual shall be considered a Domestic Partner of Owner upon presentation of an affidavit or other acceptable evidence by Owner to the City. 8. NOTICE OF INTENDED TRANSFER A. In the event the Owner intends to transfer (including without limitation all "Transfers " as defined in Section 7) or vacate the Home (or, in the event of death of the Owner, the Owner's heirs), the Owner shall promptly give the City written notice of such intent (the "Owner's Notice of Intent to Transfer ") in the form shown in the attached Exhibit C. The Owner shall give the City the Owner's Notice of Intent to Transfer prior to notifying real estate brokers or lenders of Owner's intent to Transfer the Home and prior to listing of the Home on the Multiple Listing Service. The Owner's Notice of Intent to Transfer shall be sent to the City in the manner and at the address provided in Section 33 of this Agreement. The Owner's Notice of Intent to Transfer shall include the information necessary for the City to determine the Maximum Restricted Resale Price of the Home, including the following information: (1) the address of the Home; (2) the date of purchase of the Home by the Owner; (3) the purchase price of the Home paid by the Owner at the time of his/her purchase; (4) a copy of the HUD-1 Settlement Statement or equivalent document from the close of escrow on the Owner's purchase of the Home; (5) the date on which Owner intends to vacate Home; (6) the date the Home will be placed on the market; and (7) the name and phone number of the person to contact to schedule inspection of the Home by the City. 1010\19\345304.3 20830 9. OWNER PREPARATION OF HOME FOR SALE A. The Owner may not wish to contract with a real estate broker to sell the Home until the Owner has received the City Response Notice pursuant to Section 10 below, as the services of a broker will not be required if the City exercises the City Option to purchase the Home pursuant to Section 12 below. B. Following delivery to the City of the Owner's Notice of Intent to Transfer, the Owner shall prepare the Home for sale, as follows: (1) within thirty (30) days of delivery of the Owner's Notice of Intent to Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of the Home by a licensed structural pest control operator; (2) within the sooner of (a) sixty (60) days from the date of delivery of the Owner's Notice of Intent to Transfer, or (b) prior to close of escrow on the Transfer, the Owner shall repair all damage noted in the pest report including damage caused by infestation or infection by wood-destroying pests; (3) within thirty (30) days of the date of the Owner's Notice of Intent to Transfer, the Owner shall allow the City to inspect the Home to determine its physical condition; (4) if the Home is vacant, the Owner shall maintain utility connections until the close of escrow on the Transfer; (5) in the event of purchase of the Home by the City or City Designated Purchaser, the Owner shall permit a final walk-through of the Home by the City or City Designated Purchaser, in the final three (3) days prior to close of escrow on the Transfer. 10. CITY RESPONSE TO OWNER'S NOTICE OF INTENDED TRANSFER City shall respond in writing (the "City Response Notice ") to the Owner's Notice of Intent to Transfer. The City Response Notice shall inform the Owner of the City's election to proceed under one (1) of the following two (2) alternatives: A. City Exercise of City Purchase Option. The City Response Notice may notify the Owner that the City or a City Designated Purchaser elects to exercise the City Option to purchase the Home. The City Response Notice shall be sent within thirty (30) days of City receipt of Owner's Notice of Intent to Transfer and shall include the City's calculation of the (i) Maximum Restricted Resale Price pursuant to Section 14 below to be paid by the City or a City Designated Purchaser and (ii) the transaction fee to be paid by the Owner pursuant to Section 12 below. B. Initial Term: Owner Sale at a Restricted Sales Price to Eligible Purchaser. Alternatively, the City Response Notice may notify the Owner that the City or a City Designated Purchaser will not exercise the City Option to purchase the Home. In this case, if the Owner has sent the Notice of Intent to Transfer within fifteen (15) years of the date of recordation of this 1010\19\345304.3 20831 Agreement (the "Initial Term "), the City Response Notice shall tell the Owner that the Owner may proceed to sell the Home to an Eligible Purchaser at a price not to exceed the Maximum Restricted Resale Price, as set forth in Section 14 and pursuant to the procedure set forth in Section 14 below. In this event, the City Response Notice shall include the following information: (1) the maximum qualifying income for an Eligible Purchaser (which shall be the same income category as the Owner at the time of the Owner's purchase); (2) the certifications required of an Eligible Purchaser; (3) the Maximum Restricted Resale Price the Owner may receive for the Home, calculated by the City pursuant to Section 14 below; (4) whether Homebuyer Program assistance from the City may be available to an Eligible Purchaser, (5) Owner's repayment obligation as required by Section 13. C. Extended Term Owner Sale to Market Purchaser. If the City Response Notice notifies the Owner that the City or a City Designated Purchaser will not exercise the City Option to purchase the Home, and the Owner has sent the Notice of Intent to Transfer between the fifteenth (15th) and forty-fifth (45th) years of the Term, (the "Extended Term "), the City Response Notice shall inform Owner that Owner may proceed to sell the Home to a third party at any income level (the "Market Purchaser ") for an unrestricted price. The City Response Notice shall also inform Owner of Owner's repayment obligation as required by Section 13. 11. OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE No later than seven (7) days following the date of the City Response Notice, the Owner shall acknowledge in writing to the City, in the form shown in the attached Exhibit D, that he/she has received the City Response Notice and still intends to Transfer the Home. 12. CITY PURCHASE OPTION A. The Owner agrees that if the Owner decides to Transfer the Home, the City shall have the option to purchase the Home for the Maximum Restricted Resale Price calculated pursuant to Section 14 of this Agreement (the "City Option "). The Owner shall pay the City a transaction fee equal to six percent (6%) of the Maximum Restricted Resale Price if the City or a City Designated Purchaser exercises the City Option and purchases the Home. The City Option may be exercised by the City or by a City Designated Purchaser in the City Response Notice. If the City Response Notice notifies the Owner that the City or a City Designated Purchaser will exercise the City Option to purchase the Home, the City or the City Designated Purchaser shall purchase the Home within ninety (90) days of the date of the City Response Notice and title shall be delivered by the Owner to the City by grant deed, free and clear of any mortgage or other liens, unless approved in writing by the City. B. The City may assign the City Option to another public agency, a nonprofit corporation, or an Eligible Purchaser selected by the City (any of which shall be referred to herein as a "City Designated Purchaser "). If the City assigns the City Option to a City Designated Purchaser, the City Response Notice shall be executed by the City Designated Purchaser and shall notify the Owner that a City Designated Purchaser is exercising the City Option in lieu of the City. 1010\19\345304.3 20832 C. In the event of exercise of the City Option and purchase of the Home by the City or a City Designated Purchaser, the Owner shall permit a final walk-through of the Home by the City or the City Designated Purchaser in the final three (3) days prior to close of escrow on the Transfer. D. The City acknowledges and agrees that the City Option shall only be exercised by the City or a City Designated Purchaser for the purpose of retaining the Home as an affordable housing unit and that the Home may only be resold by the City or a City Designated Purchaser as an affordable housing unit in compliance with the Homebuyer Program and/or other City affordable housing programs. 13. REPAYMENT OF CITY NOTE Upon any Transfer of the Home, the outstanding principal and Contingent Interest as well as other amounts due under the City Note shall be repaid pursuant to the City Note unless (i) the principal and Contingent Interest are assumed by an Eligible Purchaser in accordance with Section 9 of the City Note or (ii) the City exercises the City Option to purchase the Home, in which event the outstanding amount of principal and Contingent Interest and other amounts due under the City Note shall be paid to the City in the form of a credit against the purchase price to be paid by the City to the Owner. Repayment of the City Note shall not affect Owner's obligation to comply with this Agreement, which shall remain in full force and effect following any repayment of the City Note. 14. DETERMINATION OF MAXIMUM RESTRICTED RESALE PRICE The maximum sales price (the "Maximum Restricted Resale Price ") that the Owner shall receive from the resale of the Home from purchase of the Home by the City or City Designated Purchaser or from other sale or Transfer by the Owner when the Owner sends the Notice of Intent to Transfer during the Initial Term shall be the Restricted Future Sales Price or the Fair Market Value, whichever is less. A. Restricted Future Sales Price. (1) The Restricted Future Sales Price of the Home means the sales price of the Home at the time of purchase by the Owner, as set forth in Recital F to this Agreement, increased by the percentage of increase in the Median Income from the date of the original purchase of the Home by the Owner to the date of receipt by the City of the Owner's Notice of Intent to Transfer. "Median Income " shall mean the median gross yearly income for households in San Diego County, California, as adjusted for household size (which for one bedroom units will be assumed to include 2 (two) people), as published periodically by the United States Department of Housing and Urban Development ("HUD"). In the event such income determinations are no longer published by HUD, or are not updated for a period of at least eighteen (18) months, the City shall provide the Developer with other income determinations which are reasonably similar with respect to method of calculation to those previously published by HUD. As of the date of Owner's purchase of the Home, the Median Income for a household of four persons is sixty-four thousand nine hundred Dollars ($64.900 \ 1010\19\345304.3 20833 (2) The Restricted Future Sales Price shall include a downward adjustment, where applicable, in an amount necessary to repair any violations of applicable building, plumbing, electric, fire or housing codes or any other provisions of the City of Carlsbad Building Code, as well as any other repairs needed to put the Home into a "sellable condition ". Items necessary to put a Home into sellable condition shall be determined by the City, and may include cleaning, painting and making needed structural, mechanical, electrical, plumbing and fixed appliance repairs and other deferred maintenance repairs. B. Fair Market Value. In certain circumstances it may be necessary to determine the fair market value of the Home without taking account of the resale restrictions imposed by this Agreement (the "Fair Market Value "). These circumstances include: (1) where the parties wish to determine if the Restricted Future Sales Price exceeds the Fair Market Value in order to determine the Maximum Restricted Resale Price pursuant to this section; (2) where the parties wish to determine if the sales price of the Home to a Market Purchaser is comparable to the Fair Market Value; and (3) to calculate the amount due under the City Note at the end of the term of the City Note. If it is necessary to determine the Fair Market Value of the Home, it shall be determined by a certified MAI or other qualified real estate appraiser approved in advance by the City. If possible, the appraisal shall be based upon the sales prices of comparable properties sold in the market area during the preceding three (3)-month period. The cost of the appraisal shall be paid by the Owner, unless the appraisal is obtained from a new purchaser. Nothing in this section shall preclude the Owner and the City from establishing the Fair Market Value of the Home by mutual agreement in lieu of an appraisal pursuant to this section. 15. SALE BY OWNER DURING INITIAL TERM IF CITY DOES NOT EXERCISE OPTION TO PURCHASE In the event the City Response Notice notifies the Owner to proceed to sell the Home to an Eligible Purchaser at a price not exceeding the Maximum Restricted Resale Price, the Owner may proceed to sell the Home in compliance with the following requirements: A. Marketing. The Owner shall use bona fide good faith efforts to sell the Home to an Eligible Purchaser in compliance with this section, including listing the Home on the Multiple Listing Service, keeping the Home in an orderly condition, making the Home available to show to agents and prospective buyers, and providing buyers with Eligible Purchaser requirements, including income qualifications and the City's form of disclosure statement summarizing the terms of the buyer's occupancy and resale restriction agreement with option to purchase. A proposed purchaser ("Proposed Purchaser ") who the Owner believes will qualify as an Eligible Purchaser shall be referred to the City for an eligibility determination. If the Proposed Purchaser qualifies as an Eligible Purchaser the City will also determine if such Eligible Purchaser is eligible for City housing-related financial assistance that may be available at the time of resale. B. Eligible Purchaser. A Proposed Purchaser shall qualify as an "Eligible Purchaser" if he or she meets the following requirements, as determined by the City: 1010\19\345304.3 10 20834 (1) Income Eligibility. The combined maximum income for all household members of the Proposed Purchaser shall not exceed the income level designated by the City in the City Response Notice. (2) Intent to Owner Occupy. The Proposed Purchaser shall certify that he or she will occupy the Home as to his or her principal place of residence throughout his or her ownership. Co-signers are not required to occupy the Home. (3) Agreement to Sign Resale Restriction Agreement and to Cooperate with the City. The Proposed Purchaser shall agree to sign a resale restriction agreement restricting future resale of the Home and shall agree to cooperate fully with the City in promptly providing all information requested by the City to assist the City in monitoring the Proposed Purchaser's compliance with the resale restriction agreement. C. Maximum Restricted Resale Price. The purchase price for the sale of the Home by the Owner to the Eligible Purchaser shall not exceed the Maximum Restricted Resale Price calculated by the City pursuant to Section 14 above, as set forth in the City Response Notice. The closing costs paid by the Eligible Purchaser shall not exceed reasonable customary buyer's closing costs in the County of San Diego. D. Disclosure and Submittals. The Owner and the Proposed Purchaser shall provide the following information and documents to the City: (1) The name, address and telephone number in writing of the Proposed Purchaser. (2) A signed financial statement of the Proposed Purchaser in a form acceptable to the City and any other supporting documentation requested by the City. The financial information shall be used by the City to determine the income eligibility of the Proposed Purchaser. (3) The proposed sales contract and all other related documents which shall set forth all the terms of the sale of the Home. Said documents shall include at least the following terms: (a) the sales price; and (b) the price to be paid by the Proposed Purchaser for the Owner's personal Home, if any, for the services of the Owner, if any, and any credits, allowances or other consideration, if any. (4) A written certification, from the Owner and the Proposed Purchaser in a form acceptable to the City that the sale shall be closed in accordance with the terms of the sales contract and other documents submitted to and approved by the City. The certification shall also provide that the Proposed Purchaser or any other party has not paid and will not pay to the Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract and documents submitted to the City. The written certification shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certification submitted to the City, the City shall have the right to foreclose on the Home or file an action at law or in equity as may be 1010\19\345304.3 20835 appropriate. In any event, any costs, liabilities or obligations incurred by the Owner and the Proposed Purchaser for the return of any moneys paid or received in violation of this Agreement or for any of the Owner's and/or the Proposed Purchaser's costs and legal expenses, shall be borne by the Owner and/or the Proposed Purchaser and they shall hold the City harmless and reimburse the City's expenses, legal fees and costs for any action they reasonably take in good faith in enforcing the terms of this Agreement. (5) An executed buyer's resale agreement and deed of trust to the City from the Proposed Purchaser in forms provided by the City. If the Proposed Purchaser is receiving assistance from the Homebuyer Program, a promissory note to the City shall also be required. The recordation of the new deed of trust and buyer's resale agreement shall be a condition of the City's approval of the proposed sale. (6) The name of the title company escrow holder for the sale of the Home, the escrow number, and name, address, and phone number of the escrow officer. (7) Upon the close of the proposed sale, certified copies of the recorded City deed of trust and buyer's resale agreement, a copy of the final sales contract, settlement statement, escrow instructions, and any other documents which the City may reasonably request. 16. PAYMENT TO CITY OF EXCESS SALES PROCEEDS If the Owner makes a Transfer in violation of this Agreement at any time during the Initial Term or Extended Term, the Owner shall pay the Excess Sales Proceeds to the City. For purposes of this Agreement, "Excess Sales Proceeds" shall mean ninety-four percent (94%) of the amount by which the gross sales proceeds received by the Owner from the new purchaser exceed the Maximum Restricted Resale Price for the Home (in the amount that was stated in the City Response Notice). This amount shall be a debt of the Owner to the City, further evidenced by the City Note, and secured by the City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause reconveyance of this Agreement or of the City Deed of Trust until the Excess Sales Proceeds are paid to the City. The City shall utilize the Excess Sales Proceeds for City affordable housing programs. The Owner and the City acknowledge that the formula for calculation of the amount of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to receive the same net sales proceeds (following payment by Owner of a standard broker's commission) from sale of the Home at an unrestricted price to a market purchaser (in violation of this Agreement) as the Owner would receive from sale of the Home to the City, City Designated Purchaser or to an Eligible Purchaser at the Maximum Restricted Resale Price. 17. SALE OF HOME BY OWNER DURING EXTENDED TERM During the Extended Term, in the event the City Response Notice notifies the Owner to proceed to sell the Home to a Market Purchaser at a price greater than or equal to the Fair Market Value of the Home, the Owner may proceed to sell the Home in compliance with the following requirements: 1010\19\345304.3 12 20836 Upon any sale of the Home, the Owner shall submit to the City at least fifteen (15) days prior to the close of escrow, a copy of the appraisal, and a copy of the sales contract and a written declaration, under penalty of perjury, from the Owner and the proposed purchaser in a form acceptable to the City stating the gross sales price of the Home. The certification shall also provide that the proposed purchaser or any other party has not paid and will not pay to the Owner, and the Owner has not received and will not receive from the proposed purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract. At close of escrow, Owner shall submit to the City a copy of the HUD-1 Settlement Statement showing the purchase price paid for the Home. 18. DEFAULTS A. The following events shall constitute a Default by the Owner under this Agreement: (1) The City determines that the Owner has made a misrepresentation to obtain the benefits of purchase of the Home or in connection with its obligations under this Agreement; (2) The Owner fails to owner occupy the home, as required pursuant to Section 3 above, and such failure continues following written notice by the City and sixty (60) days opportunity to cure following the date of such notice. (3) The Owner rents the Home in violation of Section 4 above, and such failure continues following written notice by the City and sixty (60) days opportunity to cure. (4) The Owner fails to provide information to the City necessary to determine Owner's compliance with the requirements of this Agreement. (5) The Owner makes a Transfer in violation of this Agreement; (6) The Owner otherwise fails to comply with the requirements of this Agreement and such violation is not corrected to the satisfaction of the City within ten (10) days after the date of written notice by the City to the Owner of such violation; or (7) A notice of default is issued under First Lender Loan or other financing secured by the Home. (8) A lien is recorded against the Home other than the lien of a bona fide mortgage loan meeting the requirements of Section 28 below. (9) Owner places a mortgage on the Home in violation of Section 28 below. (10) Owner declares bankruptcy or makes an assignment of assets for the benefit of creditors. B. Upon a declaration of Default by the City under this Agreement, the City may exercise any remedies at law or in equity, including without limitation, any or all of the following: 1010\19\345304.3 13 20837 (1) Declare all Excess Sales Proceeds immediately due and payable without further demand, accelerate payments due under the City Note and invoke the power of sale under the City Deed of Trust; (2) Declare Excess Rental Proceeds due and payable; (3) Apply to a court of competent jurisdiction for such relief at law or in equity as may be appropriate; (4) Declare a Default under the City Note and the City Deed of Trust and pursue all City remedies under the City Note and the City Deed of Trust; and (5) Exercise the City Option upon Default as described in Section 21 below. 19. NOTICE AND CURE Upon Default or a violation of any of the provisions of this Agreement, the City may give written notice to the Owner specifying the nature of the violation. If the violation is not corrected to the satisfaction of the City within a reasonable period of time, not longer than thirty (30) days after the date the notice is mailed, or within such further time as the City determines is necessary to correct the violation, or if the Owner is in default under any other mortgage loan on the Home, the City may declare a default under this Agreement. The City shall notify First Lender at the address provided by the First Lender to the City in the manner set forth in Section 33 of this Agreement, if the City has declared a default under this Agreement or under the City Note or City Deed of Trust. 20. NOTICE TO CITY OF DEFAULT A request for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Home shall be recorded by the City in the Office of the Recorder of the County of San Diego for the benefit of the City. The City may declare a default under this Agreement upon receipt of any notice given to the City pursuant to Civil Code Section 2924b, and may exercise its rights as provide in Sections 18 and 21. In the event of default and foreclosure under the First Lender Loan or any other mortgage loan on the Home, the City shall have the same right as the Owner to cure defaults and redeem the Home prior to the foreclosure sale. Nothing herein shall be construed as creating any obligation of the City to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage. If the City failed to file the request for notice of default, the City's right to purchase the Home shall commence from the date a notice of default is given by the City to the Owner. 1010\19\345304.3 14 20838 21. PURCHASE OPTION UPON DEFAULT A. Purchase Option. Notwithstanding, and in addition to, the remedies provided the City in Section 18, and the City Option provided in Section 12, the Owner hereby grants to the City or the City Designated Purchaser the option to purchase the Home effective upon the declaration of a default by the City pursuant to Section 18 and Section 19 above, and subject to notice and cure rights set forth in Section 19. Said option to purchase is given in consideration of the economic benefits received by the Owner resulting from ownership of the Home made possible by the financial assistance of the City in the purchase of the Home. B. Exercise of Option. The option to purchase may be exercised upon a default under this Agreement or upon default under any promissory note, deed of trust or any other lien, including a judgment lien, recorded against the Home. The City shall have thirty (30) days after a default is declared to notify the Owner and the First Lender of its decision to exercise its option to purchase. Not later than ninety (90) days after the notice is given by the City to the Owner of the City's intent to exercise its option, the City shall purchase the Home for the Maximum Restricted Resale Price set forth in Section 14. The City may assign its rights to purchase the Home under this section to a City Designated Purchaser. C. Affordable Housing Purposes. The City acknowledges and agrees that the City option granted by this Section 21 shall only be exercised by the City or a City Designated Purchaser for the purpose of retaining the Home as an affordable housing unit and that the Home may only be resold by the City or a City Designated Purchaser as an affordable housing unit in compliance with the Homebuyer Program and/or other City affordable housing programs. 22. NONLIABILITY OF THE CITY A. No Obligation to Exercise Option. The City shall have no obligation to exercise any option granted it under this Agreement. In no event shall the City become in any way liable or obligated to the Owner or any successor-in-interest to the Owner by reason of its option to purchase under Sections 12 and 21 nor shall the City be in any way obligated or liable to the Owner or any successor-in-interest to the Owner for any failure to exercise its option to purchase. B. Nonliability for Negligence, Loss, or Damage. Owner acknowledges, understands and agrees that the relationship between Owner and the City is solely that of a Borrower and Lender and an owner and an administrator of a City inclusionary housing program, and that the City does not undertake or assume any responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or inform Owner of the quality, adequacy or suitability of the Home or any other matter. The City owes no duty of care to protect Owner against negligent, faulty, inadequate or defective building or construction or any condition of the Home and Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Home and will hold the City and Agency harmless from any liability, loss or damage for these things. 1010\19\345304.3 15 2C839 C. Indemnity. Owner agrees to defend, indemnify, and hold the City harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys fees that the City and Agency may incur as a direct or indirect consequence of: (1) Owner's default, performance, or failure to perform any obligations as and when required by this Agreement or the Deed of Trust; or (2) the failure at any time of any of Owner's representations to the City to be true and correct. 23. RESTRICTIONS ON FORECLOSURE PROCEEDS If a creditor acquires title to the Home through a deed in lieu of foreclosure, a trustee's deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited to the creditor exceed the Maximum Restricted Resale Price. The Owner shall instruct the holder of such excess proceeds to pay such proceeds (in addition to other amounts due the City pursuant to the City Note and this Agreement) to the City in consideration of the benefits received by the Owner through purchase of the Home under this Agreement. 24. RESTRICTION ON INSURANCE PROCEEDS If the Home is damaged or destroyed and the Owner elects not to rebuild or repair the Home, the Owner shall pay the City the portion of any insurance proceeds received by the Owner (subject to the rights of the First Lender) for such destruction or damage which is in excess of the Maximum Restricted Resale Price calculated pursuant to Section 14 above. 25. TERM OF AGREEMENT All the provisions of this Agreement, including the benefits and burdens, run with the land and the Home and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the City and its successors until the earlier of (i) forty-five (45) years from the date of recordation of this Agreement or (ii) the date of Transfer of the Home to the City or another purchaser in compliance with this Agreement (including execution by the purchaser of a new resale restriction agreement for the benefit of the City). 26. SUPERIORITY OF AGREEMENT The Owner covenants that he or she has not, and will not, execute any other agreement with provisions contradictory to or in opposition to the provisions of this Agreement hereof, and that, in any event, this Agreement is controlling as to the rights and obligations between and among the Owner, the City and their respective successors. 27. SUBORDINATION Notwithstanding any other provision hereof, the provisions of this Agreement shall be subordinate to the lien of the First Lender Loan and shall not impair the rights of the First Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender Deed of 1010\19\345304.3 20840 Trust in the event of default under the First Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed or assignment in lieu of foreclosure, this Agreement shall be forever terminated and shall have no further effect as to the Home or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Home pursuant to a deed or assignment in lieu of foreclosure, this Agreement shall automatically terminate upon such acquisition of title, provided that (i) the City has been given written notice of default under such First Lender Deed of Trust and (ii) the City shall not have cured or commenced to cure the default within such thirty (30)-day period and given its firm commitment to complete the cure in the form and substance acceptable to the First Lender. Owner agrees to record any necessary documents to effect such termination, if applicable. 28. REFINANCE OF FIRST LENDER LOAN A. City Consent Required. The Owner covenants and agrees not to place any additional mortgage or deed of trust, including any line of credit, on the Home without obtaining prior written consent of the City. B. Refinance of First Lender Loan. The outstanding principal on the City Note shall not be due upon prepayment and refinancing of the First Lender Loan, and this Agreement and the City Deed of Trust shall be subordinated to the refinanced First Lender Loan, provided that (i) such refinancing is approved by the City, (ii) the amount refinanced does not exceed the outstanding principal balance of the First Lender Loan at the time of refinance plus reasonable costs of refinance, and (iii) the refinance does not result in higher monthly payments on the First Lender Loan than were due prior to the refinance. The City will not approve any mortgage loan which includes negative amortization. A form for use by the Owner in requesting City subordination to a refinanced First Lender Loan is attached hereto as Exhibit E. C. Junior Loans and Equity Lines of Credit. Mortgage loans or equity lines of credit junior in lien priority to this Agreement and the City Deed of Trust are not permitted. D. Request for Notice of Default. Any time an Owner enters into a new mortgage loan, the Owner shall cause to be recorded against the Home a request for notice of default, providing for notice of default under such loan to be delivered to the City. E. Purpose of Restrictions on Refinance and Junior Loans. The City and the Owner agree that the requirements of this Section 28 are necessary to ensure the continued affordability of the Home to Owner and to minimize the risk of loss of the Home by Owner through default and foreclosure of mortgage loans. Owner further acknowledges that violation of the provisions of this Section 28 shall constitute a Default under this Agreement, for which the City may exercise the City's option upon default pursuant to Section 21 above. 29. NQNDISCRIMINATION The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in 1010\19\345304.3 17 20841 the sale, transfer, use, occupancy, tenure or enjoyment of the Home, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Home. The foregoing covenant shall run with the land. 30. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS This Agreement shall not diminish or affect the rights of the City under the City Note and the City Deed of Trust. Notwithstanding any other provision in this Agreement to the contrary, this Agreement shall not diminish or affect the rights of the California Housing Finance Agency ("CHFA "), the United States Department of Housing and Urban Development ("HUD "), the Federal National Mortgage Association ("FNMA "), or the Veterans Administration ( "VA ") under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Home in compliance with Section 28 above. 31. HUD FORBEARANCE RELIEF Notwithstanding other provisions of this Agreement, the Option shall not be exercised by the City when a deed of trust insured by HUD is secured by the Home, and (i) the Owner is undergoing consideration by HUD for assignment forbearance relief, or (ii) the Owner is undergoing consideration for relief under HUD's Temporary Mortgage Assistance Payment (TMAP) program. 32. INVALID PROVISIONS If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 33. NOTICES All notices required herein shall be sent by certified mail, return receipt requested or express delivery service with a delivery receipt or personally delivered with delivery receipt obtained and shall be deemed to be effective as of the date shown on he delivery receipt as the date of delivery, or the date delivery was refused as indicated on the return receipt, or the date Notice was returned as undeliverable as follows: To the Owner: At the address of the Home. 1010\19\345304.3 20842 To the City: City of Carlsbad Housing and Redevelopment Department 2965 Roosevelt Street, Suite B Carlsbad, CA 92008-2389 Attn: Homebuyer Program To the First Lender: The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this section. 34. INTERPRETATION OF AGREEMENT The terms of this Agreement shall be interpreted so as to avoid speculation on the Home and to insure to the extent possible that the mortgage payments remain affordable to low and moderate income households. 35. CONTROLLING LAW The terms of this Agreement shall be interpreted under the laws of the State of California. 36. EXHIBITS Any exhibits referred to in this Agreement are incorporated in this Agreement by such reference. IN WITNESS WHEREOF, the parties have executed this Agreement on or as of the date first written above. CITY: City of Carlsbad, a municipal corporation a municipaLcorporation By: OWNER: Signature Name: LISA HILDABRAND Title: ASSISTANT CITY MANAGER Print Name Signature 1010\19\345304.3 19 20843 GOVERNMENT CODE 27361.7 I CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS: NAME OF NOTARY: COMMISSION NUMBER: DATE COMMISSION EXPIRES: COUNTY WHERE BOND IS FILED: MANUFACTURER OR VENDOR NUMBER: (LOCATED ON BOTH sipES OF THE NOTARY SEAL BORDER) (FIRM NAME IF APPLICABLE) / -^x PLACE OF EXECUTION: DATED: 20844 STATE OF CALIFORNIA COUNTY OF S<TU\~t> ) ) ss. ) On Cr^ j3 ,2006, before meJthe undersigned, a Notary Public, personally appeared C<5^\<X^ fV - MofT\€LP personally known-to «ie*(or proved to me on the basis of satisfactory evidence) to be the person(«) whose name($) is/are subscribed to the within instrument, and acknowledged to me that h«/she/tbcy executed the same in hS/her/their authorized capacity(iw), and that by lasTier/their signature^ on the instrument the person{fc), or the entity upon behalf of which the person£s>) acted, executed the instrument. WITNESS my hand and official seal. REBECCA AJNSWORW Commtoilon #1654206 Notary PubMc. CaHfomta 1 San Dl«go County MyComm.ExplfeiApf2 y f ,2010f • 9 k STATE OF CALIFORNIA COUNTY OF ) ) ss. On personally appeared me weved^to-Hie the b f sat \. , 2006, before me, the undersigned; a Notary Public, , personally known to faeteievidcnee) to be the person^ whose name($f is/a*e subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacityTJe^and that by his/her/their signature^on the instrument the person^C or the entity upon behalf of which the person^ acted, executed the instrument. WITNESS my hand and official seal. 1010\19\345304.3 09-0250514 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF San Diego AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1 OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004 AS FILE NO. 2004-0446317 OF OFFICIAL RECORDS, COMPRISED OF: PARCEL 1: UNIT 571, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN FOR LAGUNA POINT, AS RECORDED ON JUNE 27, 2005, AS FILE NO. 2005-0538003, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO COUNTY, CALIFORNIA ("CONDOMINIUM PLAN"). PARCEL 2: AN UNDIVIDED 1/21ST INTEREST AS A TENANT IN COMMON IN THE UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR LAGUNA POINT HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS FILE NO. 2005-0538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED INTEREST COMMON AREA WILL NOT BE OWNED BY LAGUNA POINT HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). PARCEL 3: NON-EXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ACCESS, ENJOYMENT, USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH WILL BE OWNED BY THE ASSOCIATION. EXCEPTING THEREFROM THE FOLLOWING: (a) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN THE UNIT CONVEYED AS PARCEL 1 ABOVE. (b) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM PLAN WHICH ARE SET ASIDE AND ALLO GATED FOR THE EXCLUSIVE USE OF OWNERS OF UNITS. (c) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF 20846 09-0250514 DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE CONDOMINIUM PLAN PARCEL 4: THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS D-571. PARCEL 5: THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS S-571. PARCEL 6: ONE CLASS A MEMBERSHIP IN THE ASSOCIATION. GRANTEES IN ACCEPTING THIS DEED AND THE CONVEYANCE HEREUNDER DO HEREBY AGREE, JOINTLY AND SEVERALLY FOR THE BENEFIT OF GRANTOR AND FOR THE BENEFIT OF THE ASSOCIATION AND EACH AND EVERY ONE OF THE MEMBERS OF SAID ASSOCIATION THAT GRANTEES WILL PROMPTLY, FULLY, AND FAITHFULLY COMPLY AND CONFORM TO THE DECLARATION, THE RULES AND REGULATIONS FROM TIME TO TIME PRESCRIBED THEREUNDER BY THE BOARD OF DIRECTORS OF THE ASSOCIATION OR ITS OFFICERS AND IN PARTICULAR, GRANTEES DO HEREBY AGREE, JOINTLY AND SEVERALLY, TO PROMPTLY PAY IN FULL ANY DUES, FEES OR ASSESSMENTS LEVIED BY SAID ASSOCIATION ON THE MEMBERSHIP CONVEYED HEREBY. THE OBLIGATIONS OF GRANTEES HEREIN SET FORTH SHALL BE COVENANTS RUNNING WITH THE ABOVE DESCRIBED PROPERTY, IT BEING UNDERSTOOD THAT SAID MEMBERSHIP IN THE ASSOCIATION, AND THE OBLIGATIONS HEREOF, WILL AUTOMATICALLY PASS TO GRANTEES' SUCCESSORS IN TITLE IN THE ABOVE DESCRIBED PROPERTY WHETHER SUCH SUCCESSORS ACQUIRE TITLE BY FORECLOSURE OR OTHERWISE, AND SHALL BE BINDING UPON THE GRANTEES ABOVE-NAMED THEIR HEIRS, DEVISEES, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS, PROVIDED THAT GRANTEES AND THEIR SAID SUCCESSORS IN TITLE SHALL BE BOUND BY THE FOREGOING COVENANTS ONLY AS LONG AS THEY RESPECTIVELY ARE IN TITLE TO THE ABOVE DESCRIBED PROPERTY. THE FOLLOWING PROVISIONS (THE "RIGHT TO REPAIR PROVISIONS") PERTAINING TO MATTERS CONCERNING TITLE 7 OF PART 2 OF DIVISION 2 OF THE CALIFORNIA CIVIL CODE (THE "RIGHT TO REPAIR LAW") SHALL APPLY TO THE DEED: (a) GRANTEES ACKNOWLEDGE THAT GRANTOR HAS PROVIDED AND GRANTEES 09-0250514 20847 HAVE RECEIVED THE DOCUMENTS PROVIDED TO GRANTEES IN CONJUNCTION WITH THIS ORIGINAL TRANSFER OF THE CONDOMINIUM, INCLUDING GRANTORS'S FIT AND FINISH WARRANTY (THE "FIT AND FINISH WARRANTY") WHICH INCLUDES A ONE YEAR EXPRESS WARRANTY WHICH ADDRESSES THE STATUTORY REQUIRED COMPONENTS (CABINETS, MIRRORS, FLOORING, INTERIOR AND EXTERIOR WALLS, COUNTERTOPS, PAINT FINISHES AND TRIM), AND GRANTOR'S MAINTENANCE RECOMMENDATION (AS THE SAME MAY BE MODIFIED OR SUPPLEMENTED FROM TIME TO TIME). GRANTEES SHALL PROVIDE THE FIT AND FINISH WARRANTY TO ANY PERSON WHO PURCHASES THE CONDOMINIUM FROM GRANTEES ON OR BEFORE THE FIRST ANNIVERSARY OF THE DEED RECORDATION DATE, AND GRANTOR'S MAINTENANCE RECOMMENDATIONS (AS THE SAME MAY BE AMENDED FROM TIME TO TIME) TO ANY PERSON WHO PURCHASES THE CONDOMINIUM FROM GRANTEES AT ANY TIME. GRANTEES ACKNOWLEDGE THEIR OBLIGATION TO FOLLOW THE MAINTENANCE RECOMMENDATIONS PROVIDED BY GRANTOR, AS WELL AS ANY PRODUCT MANUFACTURERS, AND COMMONLY ACCEPTED MAINTENANCE PRACTICES. (b) GRANTOR ADVISES GRANTEES OF THE EXISTENCE OF THE PRELITIGATION PROCEDURES SET FORTH IN CHAPTER 4 OF THE RIGHT TO REPAIR LAW AND THAT SUCH PROCEDURES IMPACT THE LEGAL RIGHTS OF GRANTEES. GRANTEES ACKNOWLEDGE THAT (i) GRANTEES HAVE BEEN PROVIDED A WRITTEN COPY OF THE RIGHT TO REPAIR LAW, (ii) GRANTEES HAVE BEEN OFFERED A COMPLETE COPY OF ALL OF PART 2 AND (iii) A COMPLETE COPY OF PART 2 IS AVAILABLE FROM GRANTOR UPON REQUEST. GRANTOR INSTRUCTS GRANTEES TO, AND GRANTEES ACKNOWLEDGES THAT GRANTEES SHALL, PROVIDE SUCH DOCUMENTS TO ANY SUBSEQUENT PURCHASER OF THE CONDOMINIUM FROM GRANTEES, AND SHALL REQUIRE ANY SUCH SUBSEQUENT PURCHASER TO PROVIDE SAID DOCUMENTS TO ANY PERSON OR ENTITY WHO PURCHASES THE CONDOMINIUM FROM SUCH SUBSEQUENT PURCHASER. (c) GRANTEES SHALL INDEMNIFY, DEFEND AND HOLD GRANTOR HARMLESS FROM ANY LOSS, COST OR DAMAGES ARISING FROM GRANTEES' FAILURE TO CARRY OUT GRANTEES' OBLIGATIONS UNDER THIS DEED. 20848 EXHIBIT A Legal Description of Property (Home) 1010\19\345304.3 20849 EXHIBIT B Form of Owner Occupancy Certification To: City of Carlsbad ("City") From: Address of Home: Date: [name of owner(s)] ("Owner(s)") ("Property") By signature below, I [insert name or names of Owner] hereby certify to the City under penalty of perjury that I/we occupy the home located at [insert address] (the "Home ") as my/our principal place of residence and that I/we have occupied the Home for ( ) [insert number] months of the calendar year [insert previous calendar year]. Attached to this letter is a copy of [insert utility bill or driver's license] showing my place of residence. This Owner Occupancy Certification is signed on perjury. , 20 , under penalty of Due Date:of each calendar year. By:. By:. Owner [type name] Owner [type name] Attach copy of utility bill or driver's license showing address of Home. Also attached is a certificate of insurance for the all-risk insurance on my Home. 1010\19\345304.3 B-l 20850 EXHIBIT C Form of Owner's Notice of Intent to Transfer To: City of Carlsbad ("City ") From: [name of owner(s)] ( "Owner(s)") Address of Home: ( "Property ") Date: Please be notified pursuant to Section * of the Resale Restriction Agreement and Option to Purchase between Owner and City dated , that the Owner intends to transfer the Property listed above. A. The following information is provided to the City pursuant to Section 7 of the Resale Agreement: 1. Address of Property: 2. Date Owner purchased Property: 3. Purchase Price paid by Owner when Property was purchased: 4. Date Owner intends to vacate Property: 5. Date Property will be placed on market: 6. Name and phone number of person for City to contact to schedule inspection: and (name) (phone number) B. As required by Section 8 of the Resale Agreement, the following the HUD-1 Settlement Statement from Owner's purchase of the property is attached. C. I have not yet listed the Property for sale with a multiple listing service, or contacted a real estate broker or financial institution. I agree to prepare the Property for sale by: 1. obtaining a pest control report within thirty (30) days of the date of this notice, 2. repairing all damage noted in the pest report within the sooner of: (i) sixty (60) days from the date of this notice, or (ii) two (2) weeks prior to close of escrow or the transfer of the Property, 1010\19\345304.3 20851 3. allowing the City or its designee to inspect the Property within thirty (30) days of this notice, 4. maintaining utility connections until the Property is transferred, 5. permitting a walk through by the City prior to close of escrow or the transfer. This Owner's Notice of Intent to Transfer is certified by Owner to be true and correct and is signed on [insert date] under penalty of perjury. By:_ Owner By:_ Owner 1010\19\345304.3 C-2 20852 EXHIBIT D Form of Owner Acknowledgement of City Response Notice Name: Address of Property: Date: I, [insert name] hereby acknowledge that I received the City Response Notice (as described in Section 10 of the Resale Agreement on [insert date]. By: 1010\19\345304.3 20853 EXHIBIT E Form of Owner Request for City Subordination to Refinanced First Lender Loan To: City of Carlsbad ("City ") From: ("Owner") Property Address: ("Property ") Date: The Owner hereby requests the City to approve the Owner's refinance of the existing First Lender Loan on the Property. The Owner provides the following information which it certifies to be true and correct: 1. Original Purchase Price of Property: $ 2. Original principal balance of existing First Lender Loan: $ 3. Interest rate of existing First Lender Loan: $ 4. Outstanding principal balance of existing First Lender Loan: $ 5. Monthly payments due on existing First Lender Loan $ 6. Principal amount of proposed new First Lender Loan: $ 7. Interest rate of Proposed new First Lender Loan: $ 8. Monthly payments to be due on new First Lender Loan: $ The Owner hereby certifies the above information is true and correct and this Owner Request is executed under penalty of perjury on [insert date]. By:. Owner By: Owner 1010\19\345304.3